State readies fatter paychecks after furlough loss

ALBANY -- About 100,000 state employees can look forward to payment of withheld salary in the wake of a public employee union victory Friday in federal court against Gov. David Paterson's effort to force furloughs.

"Our interpretation of the court's decision is that the portion of the pay raise that was previously withheld will now be paid," said Morgan Hook, a Paterson spokesman.

The administration is reviewing the decision and has not decided if it will appeal the ruling by U.S. District Court Senior Judge Lawrence Kahn, Hook added.

The emergency appropriation bill sent to the Legislature contains sufficient spending authority to address the back pay and includes the necessary language change to make the payments, Hook said. The amount in back pay raises owed are best addressed by the comptroller's office, Hook said, but the governor's analysis indicates it is less than $30 million in total.

Hook had no comment when asked if the governor will create plans for layoffs, which have been proposed as a last-ditch budget reduction option.

Judge Kahn handed the Paterson administration a significant and possibly final legal setback when he issued a preliminary injunction that blocked the execution of the furlough plan as well as any additional delays to the 4 percent raises which went into effect for most unionized state workers on April 1.

The judge determined that lawsuits filed against the governor by the Public Employees Federation and the Civil Service Employees Association "have met their burden of showing irreparable harm (from the delay and furlough) and a substantial likelihood of the merits of their claim," according to the 27-page ruling.

Although the injunction is subject to appeal, the Kahn decision suggests Paterson's legal team would face a significant challenge if they press their argument that the furlough plan is a "reasonable and necessary" tactic in a time of grave fiscal peril which justified cracking open a previously negotiated contract.

After the initial restraining order, handed down by Kahn earlier this month, Paterson's budget office began paying the raises, but did not approve retroactive payments covering the five-week period between April 1 and the judge's initial order. The furlough plan, which would have required many state workers to take an unpaid day off every week until the budget is finalized, was Paterson's most controversial attempt to find savings as state leaders attempt to close an estimated $9.2 billion deficit for the current fiscal year. The state budget is now almost two months late.

The Legislature was forced to vote for the furlough plan earlier this month after Paterson included it in his fifth one-week budget extender; defeating the bill would have forced a government shutdown. The state Senate, however, simultaneously passed a resolution objecting to the furlough plan.

As he did in his initial temporary restraining order, Kahn suggested that the Senate's expression of disagreement indicated that the plan failed to meet the "reasonable and necessary" threshold.

" ... The court observes both a complete repudiation by the Senate of such a judgment and an argument by (the Paterson administration) that fails to show sufficient consideration and analysis of the kind required by the Contract Clause" of the U.S. Constitution, the ruling states.

The judge found that Paterson's citation of the budget crisis and his other attempts to alleviate it do not in and of themselves justify breaking a contract, and said that to allow such an impairment the defendants would have to demonstrate a greater effort to find less harmful alternatives.

In a statement, Paterson expressed disappointment at the ruling, but continued to make his case for concessions by the unions. In his executive budget proposal submitted in January, Paterson booked $250 million in to-be-negotiated work force savings, which unions have so far refused to negotiate.

"Today's ruling was determined in part by evidence submitted by the Legislature in opposition to the extraordinary action I took in proposing furloughs and withholding pay increases," the governor said. "However, both houses of the Legislature agree with my assertion that New York's public employee unions must contribute, along with all other New Yorkers, to solving this extraordinary fiscal crisis."

" ... In light of today's ruling, I call upon Legislative leaders to meet with the public employee union leadership to achieve the work force savings that we agree must be part of an enacted state budget," Paterson said.

But many who have watched the past weeks' legal action have wondered if Paterson has poisoned the negotiating table by imposing the furlough and raise delays.

CSEA President Danny Donohue, one of the plaintiffs in the suit, called the ruling "a victory for the rule of law."

"CSEA can only hope that the governor will recognize that his incompetent and arrogant approach to New York's budget crisis has been entirely counterproductive. ... It is time for Gov. Paterson to stop scapegoating public employees, work to bring people together and develop a comprehensive approach to the overall budget problem that will be in the best interest of all New Yorkers."